Social Responsibility Essay Example | Topics and Well Written Essays - 1500 words

Social Responsibility - Essay Example The supermarkets serve as the liaison between the manufacturers and consumers. The questions pertaining to corporate social responsibility are applicable to both the manufacturers and dispensers (or the supermarkets). The rest of this essay will ponder the question of how successful supermarkets in the UK have been in providing a sufficient range of products while also taking into consideration the long term consequences on people and environment. One of the issues related to corporate social responsibility is 'green consumption', meaning a consumption pattern that is ecologically sustainable. This translates into finding the right balance between "agricultural production and consumers, particularly the new food economy and the growth in sales of organic produce" (Gilg, Barr & Ford, 2005). Research conducted to understand the relation between citizen attitudes and responsible consumption reveals an interesting finding. In spite of most people in Britain saying that they are concerned about the environment and its health is of great importance to them, their consumption patterns remain unsustainable. ... If lack of creating awareness among consumers is a failure on part of the supermarkets, being direct contributors to environmental pollution is another criticism against supermarkets. Given that 74 percent of the retail sector in the UK is garnered by large supermarket stores, the amount of environmentally hazardous material such as plastic that they use for packaging and carry-bag needs is huge. But, some section of the sector has risen to the challenge and has erected strict rules related to plastic bags. As Lucy Neville-Rolfe states, "It is really to be welcomed that Tesco, Marks & Spencer, and some of the others, have taken sustainability seriously, and are trying to do more. But, if we want localism, variety of supply and smaller distribution chains, we want the big four supermarkets to grow less and we want more genuine choice in the high street. For instance, I read in the Guardian today about 300,000 carrier bags being fished out of the Thames on the Isle of Dogs. Why don't the leading supermarkets across UK do what the town of Modbury in Devon has done and say, "We are not going to give free carrier bags any more"'" (New Statesman, 8 Oct. 2007) Moreover, research also suggests that consumers are not entirely happy with the range of products being offered them. A common complaint among consumers is the lack of real meaningful variety among the merchandise on offer. This standardization of commodities is a phenomenon that is closely related to the 'lack of human touch' that has come to define the supermarket experience. But not all is negative about how supermarkets are perceived by the general public in the UK. With more supermarket chains in the UK taking social responsibility seriously, their endeavours in this direction have contributed to a

Analysis Odwalla Case Essay Example | Topics and Well Written Essays - 250 words

Analysis Odwalla Case - Essay Example In this case, it is Greg Steltenpohl who is currently recognized as a company founder and chairman (p. 422).the business was his brain child, and he revealed to have gotten the idea from a book. However, the founded the company alongside his wife, Bonnie Basset and friend Gerry Percy. They worked as a team so as to purchase a used hand juicer for 200$ and began producing fresh squeezed orange juice. This marked the beginning of Odwalla Company. In order to run an institution properly, it is vital to have clearly defined goals that will eventually serve the interests of the company. One of the driving concerns of Odwalla Company was to widen its clientele that eventually would serve to give it some market dominance. This was to be achieved be extending its market reach by expanding its own distribution and production capabilities and by acquiring other juice companies (p. 422).Another interest was to have a variety of products in its production line. The confirmation of this is when it added carrot juice in 1983 and apple juice in 1985 ,in its line. Odwalla also wanted to achieve rapid growth by use of bank loans and private stock earnings. Moreover, the company also wanted to be an industry producing natural fruit of high quality. Environmental conservation was also of primary concern by recycling of plastic bottles while inorganic products converted from landfills. E.Coli bacterium is spread to humans be fecal contamination when or secondary infection.It produces a potent toxin that attacks the lining of the gut. This poses a health risk to customers in the sense that in case the juices are pasteurized then the nutritional content is lost. The manner in which the case is handled is also a clear indication of how important the company values its customers.By taking responsibility of the customers health once the case is confirmed ,is a clear indication that Odwalla values its

Ways Of Raising Finance For A Business Finance Essay

Ways Of Raising Finance For A Business Finance Essay There are a number of ways of raising finance for a business. The type of finance chosen depends on the nature of the business. Large organisations are able to use a wider variety of finance sources than are smaller ones. Savings are an obvious way of putting money into a business. A small business can also borrow from families and friends. In contrast, companies raise finance by issuing shares. Large companies often have thousands of different shareholders. Sources of finance  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Uses of finance Shareholders  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Finance to set up and expand a business Bank  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚     Loans to finance capital projects.   Overdrafts to manage cashflow Creditors  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Short term credit until goods have been sold To gain extra finance, a business can take out a loan from a bank or other or other financial institution. A loan is a sum of money lent for a given period of time. Repayment is made with interest. The lender of money needs to know all the business opportunities and risks involved and will therefore want to see a detailed business plan. The lender may also want some form of security should the business run into financial difficulty, and may therefore prefer to provide a secured loan. Another way of raising short-term finance is through an overdraft facility with a bank. The borrower is given permission to take out more from their account than they have put in. The bank fixes a maximum limit for the overdraft. Interest is charged on the overdraft daily. A further way of raising funds that has become popular is through venture capital. Merchant banks and investment specialists may be willing to provide finance for a promising and fast-growing smaller business. This usually involves a package that is a mix of share and loan capital. Businesses may also qualify for grants. Government (or EU) assistance and funding is sometimes made available to businesses that meet certain conditions. For example, grants and loans may be available to firms setting up in rural areas or where there is high unemployment. Once a business is up and running there are various ways of financing its expenditures. Expensive items of equipment can be leased. Rather than buying the equipment the business hires it from a leasing company. This saves having to lay out sums of money and the business does not have to worry about having to carry out major repairs itself. Motor vehicles, machines and office equipment are often leased. Hire Purchase is an alternative way of purchasing items of equipment. With a leased item you use and pay for the item but never own it. With hire-purchase you put down a deposit on an item and then pay off the rest in instalments. When the last instalment has been paid you become the owner of the item. Another common way in which firms can finance their business in the short term is through trade credit. In business it is common practice to purchase items and pay for them later. The supplier will normally send the purchaser a statement at the end of each month saying how much is owed. The buyer is then given a period of time in which to pay. Advantages and disadvantages of equity finance Equity finance can sometimes be more appropriate than other sources of finance, eg bank loans, but it can place different demands on you and your business. The main advantages of equity finance are: The funding is committed to your business and your intended projects. Investors only realise their investment if the business is doing well, eg through stock market flotation or a sale to new investors. The right business angels and venture capitalists can bring valuable skills, contacts and experience to your business. They can also assist with strategy and key decision making. In common with you, investors have a vested interest in the business success, ie its growth, profitability and increase in value. Investors are often prepared to provide follow-up funding as the business grows. The principal disadvantages of equity finance are: Raising equity finance is demanding, costly and time consuming. Your business may suffer as you devote time to the deal. Potential investors will seek background information on you and your business they will closely scrutinise past results and forecasts and will probe the management team. However, many businesses find this discipline useful regardless of whether or not they actually receive any funding. Depending on the investor, you will lose a certain amount of your power to make management decisions. You will have to invest management time to provide regular information for the investor to monitor. At first you will have a smaller share in the business both as a percentage and in absolute monetary terms. However, your reduced share may become worth a lot more in absolute monetary terms if the investment leads to your business becoming more successful. There can be legal and regulatory issues to comply with when raising finance, eg when promoting investments.   http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1073789573type=RESOURCES TASK (2) a,b c A financial plan consists of sets of financial statements that forecast the resource implications of making business decisions. For example, a company that is deciding to expand e.g. by buying and fitting out a new factory will create a financial plan which considers the resources required and the financial performance that will justify their use. You can see from this statement that the financial plan will need to take into account sources of finance, costs of finance, costs of developing the project, as well as the revenues and likely profits to justify the expansion programme. Planning models may consist of thousands of calculations. Typically these plans will be constructed with the aid of forecasting models and spreadsheets that can calculate and recalculate figures such as profit, cash flows and balance sheets simply by changing the assumptions. For example, the business may want to do one set of calculations for low, medium, and high demand figures for its products. Long and short term plans Financial plans are typically made out for a given time period, e.g. one, three or five years. The length of the time considered depends on the importance of projecting into the future and the reliability of estimates the further we consider the future. Long-term plans are created for major strategic decisions made by a business such as: take over and merger activity expansion of capacity development of new products overseas expansion. In addition financial planning will be carried out for shorter time spans. For example, annual budgets will be created which can be analysed by month and by cost centre. Short term financial plans then provide targets for junior and middle management, and a measure against which actual performance can be monitored and controlled. In addition it is normal practice for a business to prepare a three- or five-year plan in less detail, which is updated annually. A budget is a short term financial plan. It is sometimes referred to as a plan expressed in money but it is more accurately described as a plan involving numbers. A cost centre is defined by CIMA as a production or service location, function, activity or item of equipment whose costs may be attributed to cost units. http://www.thetimes100.co.uk/theory/theoryfinancial-planning300.php The profit and loss account (P  Ã‚  L), called the income statement in the US, shows the profit or loss a company has made over a period of time. The ratios investors look at most often, such as the PE and yield, are calculated using numbers from the P  Ã‚  L Sales Also called revenues. Not always synonymous with turnover. Revenue recognition is not always simple. Cost of sales The direct costs of things sold Gross profit Sales minus cost of sales Other operating expenses Depreciation, admin, marketing etc. Operating profit Gross profit less other expenses Interest costs Interest payable less receivable Pre-tax profit Operating profit less interest Tax Profit after tax Pre tax profit less tax Dividends Retained profit Profit after tax less dividends Earnings per share The most detailed profit and loss account is given in the annual report, but UK listed companies are required to make annual and half year results announcements as well. The full year results announcement is shorter and covers the same period as the annual report, but it is released earlier. Many companies make quarterly announcements, as companies in the US and many other countries are required to. Unsurprisingly, UK listed companies that also have a secondary or dual listing in a country that requires quarterly announcements. As can be seen, the P  Ã‚  L contains several profit numbers. Each of these gives us different, and useful, information. In addition, the P  Ã‚  L (perhaps together with other information) usually gives us enough information to calculate several other profit numbers such as EBITDA and EBITA Many companies will show exceptionals separately. If there were any discontinued business, or plans to dispose of a business within a short period, these are also shown separately. These can give investors a better idea of the underlying business (the justification for doing it). For example, if the company has decided to sell a particular operation and the price has been agreed, shareholders do not really need to worry too much about that operations performance. A group balance sheet will need to be consolidated, which requires extra lines such as those for share or profit in associates and joint ventures, and the deduction of minority interests. As well as the valuation ratios, the P  Ã‚  L provides the numbers for measures of the performance and efficiency of the business, such as margins, ROCE, and some measures of financial stability such as interest cover. The P  Ã‚  L is backward looking and investors will need to consider correcting some items such as amortisation that are not useful for modelling future cash flows. From an investors point of view the P  Ã‚  L is essential, but can be misleading and should not be looked at in isolation. Related pages: Accrual principle | Accruals | Consolidated accounts | Deferred income | Depreciation | Impairment | Minority interests | Post balance sheet events | Prepayments | Pro-forma | Purchase method | Revenue recognition | Cashflow statement | Statement of total recognised gains and losses The balance sheet is one of the most important statements in a companys accounts. It shows what assets and liabilities a company has, and how the business is funded (by shareholders and by debt: the financial structure of the company). Book values are usually historical cost or fair value. The balance sheet provides information that is useful when assessing the financial stability of a company. A number of financial ratios use numbers from the balance sheet including gearing, the current assets ratio and the quick assets ratio. However, ratios based on profits and cash flow are at least as important for assessing financial stability: the most important of these are interest cover and cash interest cover. If any assets or (more commonly) liabilities that belong to the company in their economic effect do not appear on the balance sheet because accounting standards do not require it, they are referred to as off-balance sheet. Image 1 of 50

alan turing Essay -- essays research papers

Alan Turning   Ã‚  Ã‚  Ã‚  Ã‚  Alan Turning is known to be a pioneer of many facets of the computer age. The digital computer, artificial intelligence, memory subroutines, the Turning Machine, the Turing Test, and the application of algorithms to computers are all ideas somehow related to this man. Alan Mathison Turing was born in Paddington, London, on June 23, 1912. He was a precocious child and began his interests in science and mathematics at a young age, but was never concerned about other right-brain classes such as English. This continued until an important friend of his passed away and set Turing on a path to achieve what his friend could no longer accomplish. When his friend Christopher Morcom died, Turing was launched into thoughts in physics about the physical mind being embodied in matter and whether quantum-mechanical theory affects the traditional problem of mind and matter. Many say today that this was the beginnings of Turing’s Turning Machine and the test still used today for artificial intelligence, the Turing Test. Soon after his public schooling Turing began working on his undergraduate at King’s College. Here he became interested in the readings of Von Neumann’s quests into the logical foundations of quantum mechanics. Through these readings Turing was believed to structure his thinking from the emotional states that he had been suffering from to a more valid form of thought. Turing earned a fellowship at King’s college and the following year the Smith’s Prize for his work in probability theory. Afterward, he chose a path away from pure math into mathematical logic and began to work on solving the Entscheidungsproblem, a problem in decidability. This was an attempt to prove that there was a method by which any given mathematical assertion was provable. As he began to dive in to this he worked on first defining what a method was. In doing so he began what today is called the Turing Machine. The Turing Machine is a three-fold inspiration composed of logical instructions, the action of the mind, and a machine which can in principle be embodied in a practical physical form. It is the application of an algorithm embodied in a finite state machine. The Turing Machine is a simple kind of computer. It is limited to reading and writing symbols on a tape and moving the tape along to the left or right. The tape is marke... ...at today is known as the Turing Test. This was a test where a person would ask questions from both a human and a machine without knowing which was which. If after a reasonable amount of time the difference between the two was not obvious, then the machine was thought to be somewhat intelligent. A version of this test is still used today by the Boston Museum of Computers to host a contest of the best artificial machines for the Loebner Prize. Turing continued working on the digital computer and ideas in artificial intelligence until he died on June 7, 1954. He was found with a half-eaten apple loaded with cyanide, the half-eaten apple a familiar symbol of innocence. Some say he had committed suicide over an embarrassing incident with a 19-year old student , while his mother says he was just performing another experiment with household chemicals and became careless. Whichever it may be, Alan Turing passed away and left the world with many raw ideas to work out. In my opinion, the biggest contribution that he left with us was his idea of a single machine running off a finite number of algorithms to perform multiple tasks. This being the vision of the computers we all use today.

CASE: Gold Coast Advertising (GCA) Essay

George Stein sat in his large office overlooking Chicago’s Michigan Avenue. As CEO of the Gold Coast Advertising he seemed to always be confronted with one problem or another. Today was no exception. George had just come out of a long meeting with Jim Gerard, head of the board for the small advertising agency. Jim was concerned about a growing problem with lowered sales expectations and a decreasing customer base. Jim warned George that something had to be done quickly or Jim would have to go on the board of action. George acknowledges that sales were down but attributed this to general economic conditions. He assured Jim that the problems would be addressed immediately. As George pondered his next course of action, he admitted to himself that the customer base of GCA was slowly decreasing. The agency did not quite understand the reason for this decrease. Many regular customers were not coming back and the rate of new customers seemed to be slowly declining. GCA’s competitors seemed to be doing well. George did not understand the problem. What Do Customers Want? GCA was a Chicago-based advertising agency that developed campaigns and promotions for small and medium-sized firms. Their expertise was in the retail area, but they worked with a wide range of firms from the food service industry to the medical field. GCA competed on price and speed of product development. Advertising in the retail area was competitive and price had always been important. Also, since retail fashions change rapidly, speed in advertising development was thought to be critical. George reminded himself that price and speed had always been what customers wanted. Now he felt confused that he really didn’t know his customers. This was just another crisis that would pass, he told himself. But he needed to deal with it immediately.

Concept of Dynamics in Music

Imagine you are listening to Edward Sharpe and the Magnetic Zeros close their concert with 0m Nashi Me, and the whole band stops right in the middle of the song. Or you are watching The Avett Brothers open up their concert with Paranoia In B Flat Major, and by the end of the song, they are playing nearly twice the volume they started out at, and the crowd grew right alongside them. Music has the ability to produce feelings and energy that few things are capable of reproducing.There are any different elements that bring life to these feelings, but dynamics are something that possess the power to change the mood of a song, and the person listening to It. Simply put, dynamics are â€Å"variation and gradation in the volume of musical sound. † (Merriam-Webster) They are what make it possible for a song to be barely audible at the beginning, and crescendo into a powerful and moving composition. They can also change suddenly and drastically, for example a, sforzando.Sudden changes I n dynamics can be notated by adding the word subito (Italian for suddenly) s a prefix or suffix to the new dynamic notation. Accented notes , which are notes to emphasize or play louder compared to surrounding notes, can be called sforzando, sforzato, forzando or forzato (abbreviated sfz or fz). There are two Italian words that are used to show gradual changes in volume, which are the opposite of accented notes. Crescendo, abbreviated cresc. , translates as â€Å"gradually becoming louder†, and diminuendo, abbreviated dim.. means â€Å"gradually becoming softer†.The alternate decrescendo, abbreviated to decresc. also means â€Å"gradually becoming softer†. In addition to all of the volume Indications have mentioned, the execution of a given piece, for example the stylistic choices of staccato or legato are part of dynamics also. (Dynamics, music) When written in musical notation, for example in a band or orchestra piece, they are what allow for the whole band to be given very specific instructions on what the composer intended for an individual part to sound like† making dynamics Just another word in the beautiful language that music is.Although dynamics seem to be what makes music possible, music actually existed before the Introduction of different dynamic levels. The harpsichord†which Is â€Å"a keyboard instrument, precursor of the piano, in which the strings are plucked by leather or quill points connected with the keys†, (Merriam-Webster) could play only â€Å"terraced† dynamics, which are either loud or soft, but not In between. (Dynamics, music)To get around this dilemma, composters would use the trick of layering chords together to create a contrast In sounds, without a single note having to be louder or ofter.The Renaissance composer Giovanni Gabrieli was one of the first composers to Indicate dynamics In music notation, and since him, It Is hard to find a song that doesnt have variations in volume writt en in. (Dynamics, music) But, music is often left open to some interpretation by the performers or director, and dynamics are no exception to this rule. Dynamic indications are relative, not absolute. Mp does not indicate an exact level of volume; it just indicates that the part marked as such t Of3 snou10 De a llttle louder tnan p ana a llttle quleter tnan mT.Ine ty to aec10e wnat would be appropriate or best contribute to the sound as a whole group is part of what makes music great. Counting Crows has a very wise song called Big Yellow Taxi that describes perfectly the idea of appreciating things more after the absence of them. The song says, â€Å"Don't it always seem to go, that you don't know what you've got til its gone. † (Big Yellow Taxi) I think this song applies to music Just as it applies to the seasons during the year.When you're listening to a song that is very quiet, and radually or suddenly grows loud, that makes a much larger impact on the emotion of the song than if it had Just started at the louder volume. Or, if you are listening to a song that has unexpected loud notes, that instantly makes it more interesting to listen to. This applies to the seasons, especially in Minnesota, that you think you appreciate summer weather, but after a long winter, you realize how much you had missed it and welcome it much more. Contrast and diversity are what make things beautiful in all things.Whether its music, weather, people, religion, or any other xample. There is much to be learned from diversity of appearance, beliefs, experience, sound, or qualities. Early on, composers realized the power of dynamics and many uses of them in compositions have become iconic in a sense. An example is when John Cage took a chance and composed a song in 1952 that instructed the musician to go to their instrument and be silent for 4 minutes and 33 seconds. (4†² 33†²)The idea was that in the absence of what the audience was expecting, they would hear all t he environmental noise around them, and appreciate everyday sounds as music.Another example of an iconic use of dynamics is in Beethoven's 5th symphony, which was written between 1804 and 1808. (Symphony No. 5 (Beethoven)). The song starts out really intense with the 4 note fgure that everybody seems to know– regardless of their music taste. It remains intense for about a minute only to back off, then build, alternating between loud and soft and finally end with an impressive crescendo. This constant variation makes it very interesting and emotional. Another iconic example is when Count Basie and his Orchestra performed All of Me in 1965.It starts with a mooth piano and percussion line, then about a minute into the piece, almost startlingly sudden, the horns Join and instantly add life and excitement to the song. (Basie, Count) These musical geniuses, though they composed during very different stages of the development of music, all appreciated the effect dynamics could have on music. Music as definitely evolved over the years, as has the use of dynamics. There is a wide variety of musicians and bands that make dynamics a key element to their music.

Implementing Speed Limits

Implementing Speed Limits Speed limits are set putting into consideration the type of road and the time of the day. A speed limit of 70mph has been proposed in the United States especially in rural areas and those that have low populations.Advertising We will write a custom essay sample on Implementing Speed Limits specifically for you for only $16.05 $11/page Learn More The main aim of increasing the speed limit is to improve transportation services and increase the rate at which goods and services are delivered. It should be viewed as a measure to get traffic to move fast as a result of a uniform flow of traffic (1). This would make the roads safer since there would be no competition between the fast and slow moving vehicles. When cautiously implemented, increased speed limits would result to low rates of accidents because drivers tend to be more attentive when driving at high speeds and as result, there would be low insurance claims. The small changes occurring in form of toxic em issions from automobiles do not affect the environment. The most common pollutant, nitrogen dioxide may exceed the target emissions only in city centers but not on highways. Another major pollutant is airborne particulates that results from large diesel engines especially of buses and transit vehicles. The amount of this pollutant is not affected by any change in speed hence an increase in speed limit to 70mph will not cause any negative effects to the environment (1). Many other pollutants including carbon dioxide are emitted in large amounts at low speeds hence raisin the speed limit would be an added advantage to the environment since low levels of pollutants would be released at high speeds. Increased speeds would have negligible effect on the occurrence of traffic noise. This noise is created by the friction between the road surface and the tires of the vehicle (1). A high contribution to noise levels result from the weight of the vehicles and the quality of the road surface. M ore so, most highways are remote and McDonnell, Roberts. Governor McDonnell Announces 70 mph Speed Limits on 680 Miles of Interstate. Office of Governor: Virginia, 2010. far from residential areas and this makes traffic noise irrelevant since it does not affect anyone in that case. A raise in speed limit would as well affect the economy with the most evident benefit being the value of time that is saved despite the prices of fuel. The value of the time saved might be more valuable than the extra costs of fuel calculated. An increase in speed limit would result to elevated fuel consumption and consequently an increase in fuel tax rates (1). The treasury would benefit by earning extra income from the increased tax rates.Advertising Looking for essay on law? Let's see if we can help you! Get your first paper with 15% OFF Learn More Increasing the speed limit would promote safety of the motorists by allowing a consistent speed between them. Speed limits would b e posted on all highways to guide drivers and this would reduce accident rates by motorists. The number of drivers who break the law would be reduced since most drivers prefer high speeds which would now be acceptable by the law. It is also better to set realistic speed limits that will be followed by motorists than to let them ignore the badly set ones which would result to numerous accidents (1). In case of low speed limits, faster drivers tend to find other routes that have less law enforcement although they are more dangerous. An increase of a reasonable speed limit would make them get back to the roads which are constructed to suit the high speeds and are even safer to use. McDonnell, Roberts. Governor McDonnell Announces 70 mph Speed Limits on 680 Miles of Interstate. Office of Governor: Virginia, 2010. Bibliography McDonnell, Roberts. Governor McDonnell Announces 70 mph Speed Limits on 680Â  Miles of Interstate. Office of Governor: Virginia, 2010.

Butlers Chocolates Analysis Essay Sample

Butlers Chocolates Analysis Essay Sample Butlers Chocolates Analysis Essay Butlers Chocolates Analysis Essay Butlers Chocolates is an Irish appurtenant private manufacturer of premium chocolate and chocolate products. It works in the industry of chocolate, ice-cream and candy manufacturing. The manufacturer is headquartered in Dublin, Ireland. Butlers Chocolates was founded in Lad Lane in 1932 and it celebrated its 80 years of being a distributor of happiness in 2012. The manufacturer employs 250 people across manufacturing, shipping, packing, cask payments, sales and marketing, innovative production evolvement and Butlers Chocolate Cafes (History 2013). It is available in over 35 countries. Moreover, in 2012 Butlers Chocolate opened two overseas offices, in Singapore and in Dubai in particular in order to service the Asia-Pacific area together with the Middle East (Who we are 2013). The company opened the first cafà © in Dublin in 1998 and has established 17 Butlers Chocolate Cafes since then. Three of them were opened in Dublin, and all others appeared in Cork, New Zealand, London, Galwa y, Karachi, Pakistan, Westfield, Clonshaugh, and Lahore. The manufacturer has introduced its chocolate to many lovers across the world, from Shannon to Sydney and from Dublin to Dubai. In fact, the company is on sale in over 35 countries, including Australia, the USA, the Russian Federation, Singapore, and England (About us 2013). Butlers Chocolates SWOT Analysis SWOT analysis is a well-defined and structures planning method. It is used to estimate internal factors, including strengths and weaknesses, and external factors, including opportunities and threats. Internal factors encompass the internal situation of the company, whereas external factors present the external environment to the organization (Humphrey 2005). Strengths First, the company has a lot of individual, premium, and secret recipes. Secondly, it posses a unique concept, which encompasses the relaxing cafà © ambience and Butlers Chocolate cafà ©, both offering the highest quality retail outlet. Thirdly, the manufacturer introduces a number of innovations, including the mail order gifts, Internet marketing, club membership, and discount schemes, which helped the company to raise their general sales (Scott 2013). Fourthly, the company developed the entrepreneurial concept, with the help of which, the manufacturer tries to market chocolates with the help of coffees, in order to increase the sales. Fifthly, Butlers Chocolate Cafà © carried out an environmental scanning before starting with the concept of chocolates with coffee. It helped to check whether the idea is working in the market or not. Finally, Butlers Chocolates is a chocolate leader in a number of big markets, including UK and the USA (Butlers Chocolates 2013). Weaknesses First of all, it is considered that manufacturer has a relatively low promotions and advertising budget (Cleveland 2000). Most of their innovations and unique products are either unknown for the average person or poorly advertised. This shows the low market awareness of the brand. Secondly, there is the risk of production line issues. Finally, the company does not have the full access to the system in order to make any possible modifications due to the fact that Butlers Chocolates bought the hardware and backup facilities, while the software technical equipment and Labyrinth stayed the same. That is why it is crucial for further development to be able to save and update the site itself (Butlers Chocolates 2013). Opportunities First of all, there are franchise opportunities in foreign markets. Secondly, there is the opportunity to expand the airport retail model. Thirdly, Butlers Chocolates is to widen their Butlers Chocolate Cafes’ network into the USA. The premium chocolate manufacturer is to open the first retail outlet in New Jersey with further openings, which are believed to appear during the following 18 months (About us 2013). Finally, Butlers Chocolates opportunities concern technological innovations. The explosive growth of the computer and informational technology influences the way manufacturer brings value to the customers. It is hard to measure the value of a Web site, but it is obvious that the company has made a lot of money form the Internet efforts. In fact, all new technologies create new opportunities and markets. That is practically why the web-department should watch the following trend in technology in order to raise the online purchases (Scott 2013). Threats The first group of threats concerns economics and shows that there might be a decrease in the customer’s demand. Thus, the manufacturer has to be strongly market focused. Secondly, there is the treat of the competitive price pressure. Due to the intensive growth of such discounters and Lidl and Aldi, there are numerous threats from substitutes. Finally, there is the threat of higher input prices, which will be provoked by the increase of competitive prices around (About us 2013). PESTEL Analysis Political factors show to what degree the government intervenes in the economy of the country. Kuwait is a constitutional monarchy. It is an independent sovereign Arab State (Kuwait Constitution Part I n.d.). The monarchy is ruled by Emir. Such status is provided as a heritage from the previous Emir. Despite the fact that Kuwait is claimed to be a democracy, the Prime Minister and most of cabinet ministers are appointed by the Emir and not by the general population. It practically means that most cabinet ministers are from the ruling family. Moreover, Prime Minister is often a crown prince. He is chosen by the royal family. 50 members of the National Assembly are elected from five different districts. Ten members are selected from each district. The participation in the National Assembly is allowed to the native Kuwaiti or so-called â€Å"naturalized† people, who have lived there for more than 20 years (Kuwait Constitution Part I n.d.). These might be both men and women, over 21 years old. The National Assembly creates laws, which are later approved by the Emir. There are 16 cabinet ministers, who are also to attend the National Assembly. The National Assembly is selected for four years. Moreover, the Emir has the constitutional right to dissolve it (Kuwait Constitution Part I n.d.). However, the National Assembly has the right to reject the selection of the royal family concerning the crown prince and offer three different candidates from the direct descendant of the Emir (Cleveland 2000). There are several political parties in the Kuwaiti government: Islamic Salafi Alliance, the Islamic Constitutional Movement, National Islamic Alliance, Popular Action Bloc, National Democratic Alliance and Justice and Peace Alliance in particular (Cleveland 2000). The Emir is the person responsible for the assigning of the judges to courts. This is done together with the Ministry of Justice. It is known that Kuwait does not accept International Court of Justice jurisdiction (Cleveland, 2000). Despite the fact that Kuwait is the most moderate and liberal society in the region, the country is still seen as conservative from the Western perspective. Approximately 30% of Kuwait population are discriminated. The discriminations are usually based on the religion. In fact, Sunni government creates many barriers for Shia people. It concerns additional checking at the airports, freedom of speech towards Sunni, deficiency of Shia court of appeal, limitation of Shia political advertising. Durin g the last six years, National Assembly was disbanded 5 times. The last time it happened on the 20th of June 2012 (Sadek 2013). Actually, every new National Assembly questions the members of the royal family for corruption. However, the Al Sabah family is very strong, that is why the outcome is obvious (Cleveland 2000). Economic factors show how the business operates and makes decisions. Kuwait has a relatively small, wealthy, and open economy. The major source of profit is crude oil. The oil makes approximately 95% of country export and Kuwaiti government profit. Kuwait is geographically small as the country, but it has 9% of the global oil deposits. It holds the 5th place in Organization for Petrol Exporting Countries (OPEC). Kuwaiti GDP was more than $ 200bln in 2010. The GDP is 55% thanks to the oil sector, private sector encompasses 34,8%, transportation and communication makes 15,2%, financial sector encompasses 25,5%, and manufacturing makes 9,7% (World Bank Development Indicators 2008). In 2010, Kuwaiti government took two initiatives in order to provide higher diversification of the economy. The first one allows selling government property to private investors, and the second one provides $130bln of the monetary package, which has to be spent during five years in order to boost the foreign direct investments and private sector participation in the economy. Kuwait imports mainly from the US and the UAE. The top priority products the country has to buy abroad are food and beverages, construction materials, products of automotive industries and clothing. The general volume of Kuwaiti export was close to $ 22 billion in 2011 (Kurt 2003). Social factors affect the demand for various products and the way any company operates. In Kuwait live 2.7 million people: 1.3 million of non-Kuwaiti citizens and additional 900 thousands temporary together with those who have invalid visas. 85% of people are Muslim, the rest are Hindu, Christian, Parsi etc (Kjeilen 2013). Arabic is the major language; however, the English language is widely used. It is obvious that women in Kuwait do not enjoy the similar level of freedom as women in the western World, but still they are more powerful than in some radically Islamic countries, such as Saudi Arabia. In fact, women have the right to own property, to drive a car, to move within the country and abroad, to be elected, to vote, and to work. Approximately 70% of Kuwaiti students are actually female (Kjeilen 2013). According to Hofstede dimensions (Appendix A), Kuwait has a very high number for power distance, as it prefers centralized organizational structure; the ideal boss for Kuwaitis is autocrat. The second parameter, which stands for individualism and is quite low, means that Kuwait is a collectivistic community. It practically shows that various personal, inner-group relationships are believed to be more important than the law (Myers Tan 2002). All employee-employer relations are affected by personal connections. The third parameter that stands for masculinity versus femininity is more low than high. The society is relatively feminine, which is shown in situations as conflict resolution by negotiations and compromises, and the focus on well-being (Myers Tan 2002). The last parameter stands for uncertainty avoidance, and it is high. The main motivator for people to work is the fact that security and innovations may be resisted. There is no data provided for the parameter of long term orientation (Kuwait 2013). Technologic factors identify the barriers to entry, and minimum efficient production level. Kuwait almost does not produce any high-technological solutions. Moreover, there are no renewable energy sources in use (Anandarajan, Igbaria Anakwe 2002). Nevertheless, there is some movement towards high technology evolvement. The 21st century depicted a high growth in the Internet usage, in the Middle East Kuwait in particular. The growth is substantial in the Gulf Cooperation Council (Loch, Straub Kamel 2003). The Internet penetration has increase by 300% in Kuwait between 2000 and 2005 (Rouibah Hamdy 2009). Legal factors can affect the way a company operates, the costs and the demand for its products. Kuwait is a member of GCC custom union. That practically means that all of the products manufactured in those countries can work more freely across borders. In fact, the custom union will take such goods as if they have been produced in GCC only if 40% of product value has been subjoined in these countries and if GCC citizens own 51% of the company capital (Cleveland 2000). Kuwaiti legislation requires presence of local agents, distributors within the country. The licenses for import from Ministry of Commerce are valid for one year. They are renewable and allow multiple shipments. Only the local agent is able to get goods at the custom by presenting a letter of representation (Sambidge 2012). Kuwait has extremely warm tax environment for doing business. Corporate income tax is applied only to foreign entities carrying on trade or business. Tax rate of 15 % is applied to the following incom es – royalties, franchise, license, trademark, patent, and copyright fees received by foreign entities from Kuwait. Environmental factors may especially affect industries such as farming, insurance, and tourism. Kuwait is a country with a desert climate. Such type of the climate is famous for its aridity and hotness. It is possible to distinguish four seasons. Summer is extremely hot, autumn is quite warm with numerous thunderstorms, winter is relatively cool with frequent fogs, and spring is warm with thunderstorms, heavy rains, and cool winds (Kurt 2003). Porter’s Five Forces Analysis Porter’s five forces analysis is a special framework for industry analysis and strategy evolvement. It encompasses five factors, including treat of new entrants, power of suppliers, power of buyers, availability of substitutes and competitive rivalry. This analysis does more than just observing the direct competitors of a particular company. Such an analysis looks at various sides of the industry’s economic profile and environment together with the competitive structure. The idea is to observe each of these aspects and estimate the degree to which they raise the level of the competition in the industry. If the forces analysed are strong, they will raise the competition level in the industry, whereas if the forces are weak, they will decrease it. The competitive environment of an industry has a strong influence on the activity of businesses within that particular industry. Porter’s five forces define whether the industry is appealing or not from the view point of a company competing in the particular industry. Moreover, the appealing industry is the one, which provides the facilities for profitability (Peng 2009). The degree of rivalry. The degree and intensity of rivalry is the most obvious force out of five. It helps to define the measure to which the value created by the industry will be dispelled through head-to-head competition. The industry’s intensity of rivalry among competitors is medium. It is due to the fact that industry has numerous, equally balanced competitors, including Mamar General Trade Cont Co, Godiva, Alkazemi Food Industries, Al Ammed Coffe Chocolate and others (Chocolates in Kuwait 2013). In fact, the competition is tougher with the already established players. This factor is decreasing the intensity in the particular force. The industry is slowly growing. It has huge storage and fixed costs, and has low exit barriers. Moreover, there is a high scope for growth, which is aided by rising population and disposable income. All of these conditions create price wars, while advertising new product lines, and higher quality of customer service in the industry (Peng 2009) . The threat of entry. In this case, the threat of new entrants is low. Both future and already existing competitors affect general industry profitability. It is known that the threat of new entrants is usually based on the market entry barriers. According to Kuwaiti Commercial Law 68 of 1980, no foreign company cant establish a branch or do any commercial activity in the country if not doing it through the local distributor or agent. There is a rising demand for the chocolate products due to the rising population. The industry is characterized by the highly regulated markets and limited pricing power. These factors are decreasing the intensity of the force. Nevertheless, the financing options are easy. Such factors as the existence of economies of scale, the difference in products, the need for large capital requirements, the existence of switching costs, the lack of access to distribution channels, and the regulations that are in place for the food manufactures create the basis for t he low treat of new entrants. In addition, the brand name is well-known and the initial capital investment is high (About us 2013). A low threat of new entrants proves that the industry is more appealing and raises the profit facility for the companies, which are already competing within that industry (Peng 2009). Barging power of buyers. The bargaining power of buyers is medium. However, it is raised by two aspects: a number of large volume purchasers on the one hand and the general purchasers’ low profits from the product on the other hand. There is also the lack of backward integration and the firmness on the industry’s product (Wilkinson 2013). Such factor as highly differentiated offerings increases the intensity of the force. Nevertheless, there are very few players in a particular food segment, and such fact decreases the intensity of the force. Finally, there is a highly regulated pricing system, which definitely increases the bargaining power of buyers (Who we are 2013). Bargaining power of suppliers. The bargaining power of suppliers is decreased as the industry is an important customer of the supplier group, and suppliers do not pose a threat on forwarding integration. Nevertheless, the bargaining power of suppliers is high. There are no substitute products. In addition, the supplier’s product is of high importance to the industry (Wilkinson 2013). Food prices largely depend on global prices as the region imports most of its food requirements. There is the low supplier concentration. In addition, the adverse input price fluctuation might cut profitability. All these three factors decrease the intensity of a particular force. They also depict the decrease of intensity of a particular force. As the substitute products are almost not available in the marketplace, the supplier’s barging power is high (Peng 2009). Threat of substitute products and services. The level of treat of substitutes is low due to the fact that industry is dominated by large companies, having diversified offerings, which helps it to be less elastic to various price alterations. Moreover, large companies enjoy economies of scale. The consumer change-over costs are high. In addition, substitute products are more expensive than the industry products, and the quality together with the performance of the substitute product is beneath the industry’s product quality. This definitely makes the industry more appealing and raises the profit facility for the companies in the industry, while high treat of substitute products makes it less appealing and decreases the profit facility (Wilkinson 2013). Mode of Entry The selection of an institutional arrangement, meaning the mode for entering or expanding in a foreign market is one of the most important strategic decisions that an international firm has to make. A well-selected mode can provide the possibility for a company to receive competitive advantage (Osland, Taylor Zou 2001). The four main alternatives are exporting, joint venture, licensing (franchising), and wholly-owned subsidiaries. Butlers Chocolates has entered London, England, and the U.S. with the help of joint ventures (Butlers Chocolates enters the UK and IS markets 2009). Joint venture might be in favour due to several reasons: First of all, the risk is shared by each partner. Secondly, it allows having the control of the market with resource commitment (Rogmans 2013). Thirdly, it makes the adaptation and the standardization strategy to the local market easier. The company will be able to benefit from the local partner, as the knowledge will be shared. Joint venture is favourable when the partner’s strategic goals converge, the competitive goals diverge, and partners are able to learn from each other while limiting access to their own proprietary skills (Foley 1999). live CHAT Franchising system supplies with longer agreements and the franchisor provides a wider package of resources and rights. Such package usually encompasses the equipment, managerial systems, initial trainings, operational manual, site approval, and all support necessary for the franchisee to turn the business in the same direction it is done by the franchisor. Moreover, franchising is limited to trademark and operating know-how of the business (Rogmans 2013). Such entry of mode has numerous advantages: First of all, it faces low political risk. Secondly, the general costs are low. Thirdly, it allows conjoined proliferation into various regions around the globe. Finally, well chosen partners bring managerial capabilities as well as financial investment to the operation. Nevertheless, there are also several disadvantages of the international franchising mode. In fact, franchisees may turn into future competitors (Rogmans 2013). Their demand may be scarce at the beginning of a franchise company, which can lead to making agreements with the candidates. This will ruin the company’s name and reputation in the market (Loch 2001). Finally, franchising requires a higher financial investment to attract prospects and support and manage franchisees (Sherman 2004). In 2006, Butlers Chocolates tried to set-a-going of the Butlers Chocolate Cafà © concept on the international level. They planned to do that by well-motivated and capable franchisees. The company believes that this is a perfect method to show Butlers Chocolates to a wider audience (Hoy Stanworth 2013). It allows combining the expertise and the local knowledge of franchisees based on the broader audience. This will ensure the maintenance of the products and service quality. There will be no r estrictions on location. In fact, Butlers Chocolates are committed to continue the roll-out of international franchise operations (Franchising 2013). They propose a franchisee to deal with one and only store franchise. In particular cases, they provide the right to enter into an Area Development Agreement (Butlers Chocolate Cafà © Limited 2013). Practically, these two entries of mode are to be chosen while introducing and expanding the company in Kuwait (Streib 2007). Two strategic rules might be used by Butlers Chocolates while entering a foreign market First of all, they should operate the business through joint venture by searching a popular an enriched local firm if there is a need to consider economic scale, politics and culture differences. Secondly, if the company wants to start with a low commitment entry mode, it is better to apply franchising, which will allow to move to a great level of ownership and controls as they develop the requisite local knowledge.

Ba Finance

By 1985 Arthur had already sold his dairy herd to focus on cereal production when a fortuitous meeting with Lucy Bellingham at a business conference led him to reconsider the future of the family farm. Bellingham is a designer of bespoke fitted kitchens who had a business plan but little capital. The plan was to manufacture top quality fitted kitchen furniture and establish design studios/showrooms in high income areas. Having recently sold his dairy herd, Arthur had enough capital to fund the new business and also a number of large barns and outbuildings suitable for manufacturing the kitchen units subject to refitting and planning consent being obtained. Lucy’s business plan was so convincing that Arthur decided to get out of farming altogether (by leasing his arable land to a local co-operative) and focus on developing the new business. From this small beginning grew the now publicly quoted company of Bellingham plc. Initially, showrooms were established in Beaconsfield and then Kensington. Demand for their kitchens was brisk and â€Å"Bellingham Bespoke Kitchens† expanded rapidly but remained a partnership. The firms clients are mainly celebrities from the entertainment world and the cost of a Bellingham Bespoke Kitchen is now ? 40,000 – ? 150,000 or more. The firm was restructured as a limited company in 1990 and subsequently experienced rapid growth until 1999. In that year the then directors decided that the business had reached the limit of development in it’s present form. Future development required large-scale expansion of production facilities in order to provide the range of materials, furniture, quality and prompt delivery required by their discerning clients. This in turn needed an injection of capital that the directors were unable to generate themselves. The conviction that there was much money to be made from â€Å"quality fitted kitchens† † had been vindicated. They investigated a number of possibilities deciding eventually to expand production facilities by purchasing a modern production unit on an industrial estate in Aylesbury. The expansion was funded by a stock market floatation and raising the necessary capital in the name of Bellingham plc. As the market grew and to keep abreast of new production technology, the directors agreed to reverse the maxim so dear to the heart of the founders, Arthur and Lucy; â€Å"neither a (long-term) borrower nor lender be. † They financed updating of equipment and premises by means of issuing debentures. It is now October 2012 and the present directors of Bellingham plc believe that the long-term success of the company lies in future international diversification and expansion. They consider that the most beneficial action they could take is to investigate the acquisition of a subsidiary in the USA. The newly-appointed finance director, Bill Moneypenny, agrees with this opinion but insists that the company must first appraise its own current position and if necessary, make changes to strengthen its existing financial situation before embarking on new plans. He is particularly concerned that the company should preserve adequate liquidity and finance its assets in a beneficial manner. He is also concerned that too much emphasis has been placed on â€Å"pandering to the whims of the rich and famous† and not enough on running an efficient business operation. Lucy and Arthur still retain 30% of Bellingham’s equity and other long-standing directors own a further 20%; a change of control is unlikely to be welcome. During the last two years, the company has updated it’s design, production and showroom assets and, in what has been a difficult year, has been able to maintain sales and profit growth (see Bellingham’s accounts in appendix 1). There has been a great deal of uncertainty about world economic growth and stock markets have been extremely volatile resulting low returns. However the firm’s ordinary shares have made good progress during the year. Ordinary share dividends have achieved substantial growth over the last two years although this rate of increase is not expected to continue. Ordinary dividends have grown at an average rate of 14% per annum over the past 10 years and this rate is a more realistic growth rate for future dividends. The present market prices for Bellingham’s shares and debentures are: ?1 Ordinary shares? 7. 02 ex div ?0. 50p, 6% Pref shares? . 55 ex div 7% Debentures 2016? 100. 51 ex interest Any new venture would be expected to achieve a return on capital employed in line with that experienced recently by Bellingham plc. The finance director favours a payback period of 5 years. Bellingham would therefore need to agree a realistic acquisition price for such a new venture and its future cash flows in order to determine whether these criteria could be met. Although a number of investment projects are being considered, the main proposal currently being investigated offers an expansion into the US prime-property market which is forecast to grow faster than the UK market. Bellingham’s finance director has already calculated the trends in the financial ratios of American Creations, an unquoted US company, from its unaudited annual accounts (see appendix 2) and has concluded that the proposal is now worthy of further investigation. American Creations is a family-owned venture requiring further capital to repair it’s balance sheet after making losses on a property development in Nevada from which it has now withdrawn. Profits have suffered in the last two years due to write-offs associated with this development. The existing owners feel that the firm’s future lies in establishing wider international links and the retirement of senior family members, leaving the younger members active in the management of the firm. They are therefore considering selling a controlling interest of 60% to a suitable company. The firm has been established for 23 years, and is well respected in business circles. The average age of its fixed tangible assets is 3 years. The directors have indicated that they may accept part payment in Bellingham shares subject to negotiation. The firm’s nominal share capital is $2. m, and the directors have indicated that they value the firm at five times the year 2010 net profit. They consider this to be the firm’s â€Å"normal† level of profit excluding the â€Å"extraordinary† effects of the Nevada development. As the firm is at present family owned and run, there is no available price/earnings ratio. P/E ratios for the only two publicly-owned c ompanies in the same business sector, Harvey Wilkinson Designs plc and Cucci Lifestyle plc, are currently 10 and 8 times respectively although both of these firms, unlike Bellingham, operate internationally. Wilkinson has grown at a similar rate to Bellingham. The dividend yields of these companies have been as follows: WilkinsonCucci Year to 31 December 2011 8. 1% 7. 25% 2010 7. 2% 6. 9% 2009 5. 3% 5. 95% American Creations has its own manufacturing facilities and operates throughout the USA and Caribbean with design offices in New York, Miami, Los Angeles and Colorado Springs. Their main business, which is thriving, involves complete home furnishing and interior design for wealthy clients. In addition, the firm has a real estate office in each location and is thus able to offer a complete property service. The value of properties handled by the real estate offices is typically $5m – $20m. Bellingham is interested not only in extending its operations internationally but particularly in the possibility of diversifying into the real estate business. Whilst well aware of the existence of a number of competitors, the directors feel that there is a ready market in the US for their established name in terms of design flair, service and products. After discussions with the directors of American Creations, Bill Moneypenny has produced the following forecast. Under average economic growth conditions, the American Creations operating forecasts (in $*1000) for the next five years are based on the following: Income:from Sales: $7500 in 2013, rising by 12% per annum for the foreseeable future. from real estate sales commissions: $2850 in 2013 increasing by 15% per annum for the foreseeable future. Manufacturing variable costs: Labour: $1250 in 2013, expected to increasing by 8% per annum. Materials: $3800 in 2013, expected to increasing by 5% per annum. Fixed costs excluding depreciation: Manufacturing O/H: $2065 in 2013, increasing by 5% per annum. General O/H: $1850 in 2013, increasing by 2% per annum. Depreciation:Factory, machinery vehicles: $500 per year. Office/Design Studio fixtures: $200 per year. The beta of Bellingham plc is believed to be 1. 65 , the risk-free rate of return is 5. 5% and the return for the last year on the FT All-share index is 2%. UK corporation tax is currently 32% payable 9 months after the end of the accounting year in question (you may assume for the purpose of this case that accounting profit and taxable profit are identical. ) Bellingham’s directors estimate that the after-tax profits of American Creations could be allocated as follows: 70% as retained earnings and 30% as dividends. This has been the pattern under the under the present ownership. There would be no restriction on the transfer of the appropriate share of these dividends to the UK. The US corporation tax rate applicable is 20% payable in the year in which the profit arises. There is no double taxation of profits of US origin in the UK. (For the purpose of this case, ignore the possibility of any withholding taxes and the effects of foreign exchange risk. It is considered possible that, as the US economy develops further, even higher wages than those forecast may be demanded by the workforce. Required: Evaluate the American Creations proposal on behalf of Bellingham plc, supporting your arguments with relevant theory and calculations and indicating any non-financial matters you feel should be taken into consideration. Your report should consider the following areas: 1. An analysis of Bellingham’s current position using relevant financial ratios. You should show the calculation of the ratios and provide interpretation of the results. . Calculation of Bellingham’s cost of capital, using alternative methods and arriving at the most appropriate figure. 3. An investment appraisal of the American Creations proposal assuming the valuation suggested in the case, using a variety of methods and evaluation of the results. 4. A sensitivity analysis of the proposal and interpretation of the results. 5. Calculation and discussion of alternative valuations for acquiring the share in American Creations and how these would impact on the investment appraisal. 6. A discussion of the various available methods of financing the acquisition and consideration of which is the most appropriate. Your calculations and arguments should be supported by relevant theory, with evidence of wide reading around the subject. You should provide a complete bibliography with appropriate referencing in your report. Submission requirements: Your answer should take the form of a written report of approximately 2500 words excluding appendices and the reference list. Deviations from the word count exceeding plus or minus 10% will attract a penalty of 5%. The hand-in deadline for submission is 23. 0 on 25th November 2012. Submissions up to 24 hours late will attract a 10% penalty whilst those beyond 24 hours but less than 1 week late will be capped at 40%. Reports submitted more than one week late will attract a mark of zero. Submit one electronic copy via Studynet. This is an individual assignment and the report submitted should be entirely your own work. Appendix 1:B ellingham plc| | | | | | | Abridged Trading, Profit Loss Account for the year ended 30th June 2012:| All amounts are in thousands of pounds sterling| | | | | | | | | | | | | | | | | | | 2012| | 2011| | 2010| | Sales| 9606| | 7564| | 6100| | Production Cost| 4034| | 3101| | 2240| | Gross Profit| 5572| | 4463| | 3860| | | | | | | | | Selling Expenses| 1467| | 1250| | 1080| | Installation Expenses| 1689| | 1300| | 980| | Administration Expenses| 960| | 630| | 597| | Operating Profit| 1456| | 1283| | 1203| | Debenture Interest| 53| | 53| | 53| | Profit Before Tax| 1403| | 1230| | 1150| | Corporation Tax| 449| | 394| | 368| | Profit After Tax| 954| | 836| | 782| | Dividends| 341| | 280| | 220| | Retained earnings| 613| | 556| | 562| | Balance Sheet at 30th June 2012:| | | | | | | | | | | | | Fixed Assets (net):| | | | | | | Land Buildings| 2300| | 2400| | 2500| | Plant Machinery| 1700| | 1186| | 552| | Fixtures Fittings| 700| | 600| | 402| | Motor Vehicles| 185| | 140| | 105| | Office equiptment| 250| | 185| | 100| | | 5135| | 4511| | 3659| | Current Assets:| | | | | | | Stocks: Raw Materials| 216| | 208| | 182| | Work in Progress| 200| | 205| | 190| | Finished Goods| 150| | 128| | 97| | Debtors| 1775| | 950| | 595| | Bank/Cash| 230| | 136| | 104| | | 2571| | 1627| | 1168| | Current Liabilities:| | | | | | | Trade Creditors| 1190| | 788| | 270| | Corporation Tax| 449| | 394| | 368| | Final Dividend| 171| | 140| | 110| | | 1810| | 1322| | 748| | | | | | | | | Net Current Assets| 761| | 305| | 420| | Net Assets| 5896| | 4816| | 4079| | | | | | | | | Long-term Liabilities:| | | | | | | 9% Debentures 2016| 750| | 750| | 750| | | | | | | | | | 5146| | 4066| | 3329| | | | | | | | | Shares reserves| | | | | | | ?1 ordinary shares| 1000| | 1000| | 1000| | 6% Preference shares of 50p ea,| 500| | 500| | 500| | Retained pr for yr| 613| | 556| | 562| | Profit loss| 3033| | 2010| | 1267| | Shareholders funds| 5146| | 4066| | 3329| | Ba Finance By 1985 Arthur had already sold his dairy herd to focus on cereal production when a fortuitous meeting with Lucy Bellingham at a business conference led him to reconsider the future of the family farm. Bellingham is a designer of bespoke fitted kitchens who had a business plan but little capital. The plan was to manufacture top quality fitted kitchen furniture and establish design studios/showrooms in high income areas. Having recently sold his dairy herd, Arthur had enough capital to fund the new business and also a number of large barns and outbuildings suitable for manufacturing the kitchen units subject to refitting and planning consent being obtained. Lucy’s business plan was so convincing that Arthur decided to get out of farming altogether (by leasing his arable land to a local co-operative) and focus on developing the new business. From this small beginning grew the now publicly quoted company of Bellingham plc. Initially, showrooms were established in Beaconsfield and then Kensington. Demand for their kitchens was brisk and â€Å"Bellingham Bespoke Kitchens† expanded rapidly but remained a partnership. The firms clients are mainly celebrities from the entertainment world and the cost of a Bellingham Bespoke Kitchen is now ? 40,000 – ? 150,000 or more. The firm was restructured as a limited company in 1990 and subsequently experienced rapid growth until 1999. In that year the then directors decided that the business had reached the limit of development in it’s present form. Future development required large-scale expansion of production facilities in order to provide the range of materials, furniture, quality and prompt delivery required by their discerning clients. This in turn needed an injection of capital that the directors were unable to generate themselves. The conviction that there was much money to be made from â€Å"quality fitted kitchens† † had been vindicated. They investigated a number of possibilities deciding eventually to expand production facilities by purchasing a modern production unit on an industrial estate in Aylesbury. The expansion was funded by a stock market floatation and raising the necessary capital in the name of Bellingham plc. As the market grew and to keep abreast of new production technology, the directors agreed to reverse the maxim so dear to the heart of the founders, Arthur and Lucy; â€Å"neither a (long-term) borrower nor lender be. † They financed updating of equipment and premises by means of issuing debentures. It is now October 2012 and the present directors of Bellingham plc believe that the long-term success of the company lies in future international diversification and expansion. They consider that the most beneficial action they could take is to investigate the acquisition of a subsidiary in the USA. The newly-appointed finance director, Bill Moneypenny, agrees with this opinion but insists that the company must first appraise its own current position and if necessary, make changes to strengthen its existing financial situation before embarking on new plans. He is particularly concerned that the company should preserve adequate liquidity and finance its assets in a beneficial manner. He is also concerned that too much emphasis has been placed on â€Å"pandering to the whims of the rich and famous† and not enough on running an efficient business operation. Lucy and Arthur still retain 30% of Bellingham’s equity and other long-standing directors own a further 20%; a change of control is unlikely to be welcome. During the last two years, the company has updated it’s design, production and showroom assets and, in what has been a difficult year, has been able to maintain sales and profit growth (see Bellingham’s accounts in appendix 1). There has been a great deal of uncertainty about world economic growth and stock markets have been extremely volatile resulting low returns. However the firm’s ordinary shares have made good progress during the year. Ordinary share dividends have achieved substantial growth over the last two years although this rate of increase is not expected to continue. Ordinary dividends have grown at an average rate of 14% per annum over the past 10 years and this rate is a more realistic growth rate for future dividends. The present market prices for Bellingham’s shares and debentures are: ?1 Ordinary shares? 7. 02 ex div ?0. 50p, 6% Pref shares? . 55 ex div 7% Debentures 2016? 100. 51 ex interest Any new venture would be expected to achieve a return on capital employed in line with that experienced recently by Bellingham plc. The finance director favours a payback period of 5 years. Bellingham would therefore need to agree a realistic acquisition price for such a new venture and its future cash flows in order to determine whether these criteria could be met. Although a number of investment projects are being considered, the main proposal currently being investigated offers an expansion into the US prime-property market which is forecast to grow faster than the UK market. Bellingham’s finance director has already calculated the trends in the financial ratios of American Creations, an unquoted US company, from its unaudited annual accounts (see appendix 2) and has concluded that the proposal is now worthy of further investigation. American Creations is a family-owned venture requiring further capital to repair it’s balance sheet after making losses on a property development in Nevada from which it has now withdrawn. Profits have suffered in the last two years due to write-offs associated with this development. The existing owners feel that the firm’s future lies in establishing wider international links and the retirement of senior family members, leaving the younger members active in the management of the firm. They are therefore considering selling a controlling interest of 60% to a suitable company. The firm has been established for 23 years, and is well respected in business circles. The average age of its fixed tangible assets is 3 years. The directors have indicated that they may accept part payment in Bellingham shares subject to negotiation. The firm’s nominal share capital is $2. m, and the directors have indicated that they value the firm at five times the year 2010 net profit. They consider this to be the firm’s â€Å"normal† level of profit excluding the â€Å"extraordinary† effects of the Nevada development. As the firm is at present family owned and run, there is no available price/earnings ratio. P/E ratios for the only two publicly-owned c ompanies in the same business sector, Harvey Wilkinson Designs plc and Cucci Lifestyle plc, are currently 10 and 8 times respectively although both of these firms, unlike Bellingham, operate internationally. Wilkinson has grown at a similar rate to Bellingham. The dividend yields of these companies have been as follows: WilkinsonCucci Year to 31 December 2011 8. 1% 7. 25% 2010 7. 2% 6. 9% 2009 5. 3% 5. 95% American Creations has its own manufacturing facilities and operates throughout the USA and Caribbean with design offices in New York, Miami, Los Angeles and Colorado Springs. Their main business, which is thriving, involves complete home furnishing and interior design for wealthy clients. In addition, the firm has a real estate office in each location and is thus able to offer a complete property service. The value of properties handled by the real estate offices is typically $5m – $20m. Bellingham is interested not only in extending its operations internationally but particularly in the possibility of diversifying into the real estate business. Whilst well aware of the existence of a number of competitors, the directors feel that there is a ready market in the US for their established name in terms of design flair, service and products. After discussions with the directors of American Creations, Bill Moneypenny has produced the following forecast. Under average economic growth conditions, the American Creations operating forecasts (in $*1000) for the next five years are based on the following: Income:from Sales: $7500 in 2013, rising by 12% per annum for the foreseeable future. from real estate sales commissions: $2850 in 2013 increasing by 15% per annum for the foreseeable future. Manufacturing variable costs: Labour: $1250 in 2013, expected to increasing by 8% per annum. Materials: $3800 in 2013, expected to increasing by 5% per annum. Fixed costs excluding depreciation: Manufacturing O/H: $2065 in 2013, increasing by 5% per annum. General O/H: $1850 in 2013, increasing by 2% per annum. Depreciation:Factory, machinery vehicles: $500 per year. Office/Design Studio fixtures: $200 per year. The beta of Bellingham plc is believed to be 1. 65 , the risk-free rate of return is 5. 5% and the return for the last year on the FT All-share index is 2%. UK corporation tax is currently 32% payable 9 months after the end of the accounting year in question (you may assume for the purpose of this case that accounting profit and taxable profit are identical. ) Bellingham’s directors estimate that the after-tax profits of American Creations could be allocated as follows: 70% as retained earnings and 30% as dividends. This has been the pattern under the under the present ownership. There would be no restriction on the transfer of the appropriate share of these dividends to the UK. The US corporation tax rate applicable is 20% payable in the year in which the profit arises. There is no double taxation of profits of US origin in the UK. (For the purpose of this case, ignore the possibility of any withholding taxes and the effects of foreign exchange risk. It is considered possible that, as the US economy develops further, even higher wages than those forecast may be demanded by the workforce. Required: Evaluate the American Creations proposal on behalf of Bellingham plc, supporting your arguments with relevant theory and calculations and indicating any non-financial matters you feel should be taken into consideration. Your report should consider the following areas: 1. An analysis of Bellingham’s current position using relevant financial ratios. You should show the calculation of the ratios and provide interpretation of the results. . Calculation of Bellingham’s cost of capital, using alternative methods and arriving at the most appropriate figure. 3. An investment appraisal of the American Creations proposal assuming the valuation suggested in the case, using a variety of methods and evaluation of the results. 4. A sensitivity analysis of the proposal and interpretation of the results. 5. Calculation and discussion of alternative valuations for acquiring the share in American Creations and how these would impact on the investment appraisal. 6. A discussion of the various available methods of financing the acquisition and consideration of which is the most appropriate. Your calculations and arguments should be supported by relevant theory, with evidence of wide reading around the subject. You should provide a complete bibliography with appropriate referencing in your report. Submission requirements: Your answer should take the form of a written report of approximately 2500 words excluding appendices and the reference list. Deviations from the word count exceeding plus or minus 10% will attract a penalty of 5%. The hand-in deadline for submission is 23. 0 on 25th November 2012. Submissions up to 24 hours late will attract a 10% penalty whilst those beyond 24 hours but less than 1 week late will be capped at 40%. Reports submitted more than one week late will attract a mark of zero. Submit one electronic copy via Studynet. This is an individual assignment and the report submitted should be entirely your own work. Appendix 1:B ellingham plc| | | | | | | Abridged Trading, Profit Loss Account for the year ended 30th June 2012:| All amounts are in thousands of pounds sterling| | | | | | | | | | | | | | | | | | | 2012| | 2011| | 2010| | Sales| 9606| | 7564| | 6100| | Production Cost| 4034| | 3101| | 2240| | Gross Profit| 5572| | 4463| | 3860| | | | | | | | | Selling Expenses| 1467| | 1250| | 1080| | Installation Expenses| 1689| | 1300| | 980| | Administration Expenses| 960| | 630| | 597| | Operating Profit| 1456| | 1283| | 1203| | Debenture Interest| 53| | 53| | 53| | Profit Before Tax| 1403| | 1230| | 1150| | Corporation Tax| 449| | 394| | 368| | Profit After Tax| 954| | 836| | 782| | Dividends| 341| | 280| | 220| | Retained earnings| 613| | 556| | 562| | Balance Sheet at 30th June 2012:| | | | | | | | | | | | | Fixed Assets (net):| | | | | | | Land Buildings| 2300| | 2400| | 2500| | Plant Machinery| 1700| | 1186| | 552| | Fixtures Fittings| 700| | 600| | 402| | Motor Vehicles| 185| | 140| | 105| | Office equiptment| 250| | 185| | 100| | | 5135| | 4511| | 3659| | Current Assets:| | | | | | | Stocks: Raw Materials| 216| | 208| | 182| | Work in Progress| 200| | 205| | 190| | Finished Goods| 150| | 128| | 97| | Debtors| 1775| | 950| | 595| | Bank/Cash| 230| | 136| | 104| | | 2571| | 1627| | 1168| | Current Liabilities:| | | | | | | Trade Creditors| 1190| | 788| | 270| | Corporation Tax| 449| | 394| | 368| | Final Dividend| 171| | 140| | 110| | | 1810| | 1322| | 748| | | | | | | | | Net Current Assets| 761| | 305| | 420| | Net Assets| 5896| | 4816| | 4079| | | | | | | | | Long-term Liabilities:| | | | | | | 9% Debentures 2016| 750| | 750| | 750| | | | | | | | | | 5146| | 4066| | 3329| | | | | | | | | Shares reserves| | | | | | | ?1 ordinary shares| 1000| | 1000| | 1000| | 6% Preference shares of 50p ea,| 500| | 500| | 500| | Retained pr for yr| 613| | 556| | 562| | Profit loss| 3033| | 2010| | 1267| | Shareholders funds| 5146| | 4066| | 3329| |

Case 5 Ethics - Working Conditions Essay Example | Topics and Well Written Essays - 750 words

Case 5 Ethics - Working Conditions - Essay Example Jameson (2010, February 1) disagreed with this article in â€Å"Fed Up with Fat.† He asserted that fat people should be penalized for not actively addressing health issues, in the same way that smokers are paying more for their insurance because of their bad habit. This paper asks: Should an overweight employee who chooses not to participate in a wellness program be penalized? Using deontology and utilitarianism, it stresses that when a personal problem has widespread negative social consequences, then that person should be penalized for not participating in wellness programs, if healthcare assistance is free and other support systems are present. Deontology focuses on respecting people as ends, not as means to ends, and people have autonomy over their bodies, which society should not violate. Deontological thinking does not support stigmatizing people, especially because of physical differences (Morrison, 2009, p.403). Jameson (2010) talked about weight discrimination, which is immoral, because a person should be hired based on merit and other objective qualifications, not because of their weight. Tsai and Bessesen (2012) pointed out that many normal-weight people are actually unhealthy, such as smokers and those who are fond of eating fried, sweet, and salty foods, and yet are not gaining extra weight. They stressed that other fat people, on the contrary, are eating or living healthy, but they continue to have weight issues. This comparison highlights the injustice of being stigmatized because of being overweight. Furthermore, it is wrong to penalize people just because they are overweight, specifically people who are genetically predisposed to be overweight. Tsai and Bessesen (2012) mentioned that genetic studies prove that obesity has genetic causes, which is why some people get fat easily and have an unusually hard time losing weight. Some of them might even have illnesses that store fats in their bodies. Tsai and Bessesen (2012) stressed that socie ty will only be doing more harm than good, if it penalizes people who hardly have control over genetic predispositions. In addition, fat people are ends in themselves. They have autonomy, and they cannot be forced to apply in wellness programs, if they lack time and resources (Morrison, 2009, p.403). They might also have other issues, such as childcare, whereas if they spend time in these wellness programs, they have no money or no one to take care of their children. If these people are penalized despite these conditions, they are being seen as means to ends. The ends served are those of society, or the â€Å"thin† strata, who do not strive to understand the genetic, economic, and social conditions and limitations of the overweight. Fat people are people-as-ends too, and their autonomy over matters that concern their private bodies must be protected. Deontology further argues that the healthcare sector has a primary duty to do no harm to the obese. Healthcare professionals ha ve a duty to help the obese be aware of their options, in order for them to have a normal weight (Morrison, 2009, p.403). They must discuss prevention, not only cure, and suggest the best treatments and interventions to help the overweight deal with their weight problems (Morrison, 2009, p.403). The principle of beneficence is important. They must do no harm to the obese, and they can attain this if they provide the resources needed to help them (Morrison, 2009,

Market Entry into China (According to case study finish a Report) Essay

Market Entry into China (According to case study finish a Report) - Essay Example China becomes a hot favourite for investment in the sectors of cooperative enterprises, joint ventures. â€Å"According to Zhang (2005), the impact of the overseas Chinese on China’s FDI inflows can be seen at least in two ways. First, the overseas Chinese invest in China based on language and historical bonds; accordingly they possess advantages in operations in China. Second, the overseas Chinese act as a bridge through which foreign investors understand the Chinese culture.† (Devinney et al 2010). The country, however, did not allow solely foreign-owned ventures earlier, and they had limitation of technological support. This situation has now changed and through export from other countries they now have all the infrastructural facilities. China has now removed many limits, which were also different from their WTO promises and encouraged foreign-owned ventures to guide in higher technology and add to their export quantity. Thus, only foreign-owned enterprise under joint venture model is the most accepted structure of FDI in China. There are a mixture of FDI available in China and the most common among them have been the Equity Joint Venture, Co-operative Joint Venture, and, to rising quantity, completely Foreign Owned Enterprise. However, they have a viable system of legislation and ground rules for creating such ventures and suitable government approvals and business licenses are mandatory. Hong Kong and East Asia are the main sources of FDI in China. Presently Taiwan is also a major source of China’s FDI with increasing amount of investment. Taiwan positions as the second place of FDI in China. â€Å"During the past two years, the government has been working to reform the foreign investment approval system. The approval procedure for five categories of foreign investment has now been vastly simplified, as the central government has allocated significant approval power to its local counterparts.   For foreign investment projects with

National Labor Relation Act and Employee Rights Essay

National Labor Relation Act and Employee Rights - Essay Example The program will take two weeks of an intense training for the supervisors, during which the supervisors will be trained four hours every day, except for the weekends. Therefore, the training will constitute a ten-day training program, undertaken by the labor professionals and hired legal experts on employment from the labor department and other various professional labor organizations. At the end of the training, the supervisors will be required to undertake a test regarding the training, where only the ones who pass the test will be retained, while the ones who fail will be replaced. The program will also include a regular refresher course, undertaken once every 4 months for a three-day period, where the supervisors will refresh their knowledge on the duties, rights , freedoms and responsibilities of the employees and the employers, while also learning new developments in that area. Under the training program, several employee rights, freedoms, duties, and responsibilities will be covered, to equip the supervisors with the rightful knowledge about the rights of the employees, and, thus, to ensure that they do not interfere into such rights in the future. First, employees have the rights to attempt to form or to form a union in their workplace (Sack, 2010). Therefore, the supervisors will be trained to acknowledge the rights of the employees to establish unions within their workplaces, which will be used as a basis of championing for their rights, while also being as the bargaining vehicles for the employees, through which they can channel their grievances to the employers. The recognition of the fundamental right of the employees to form a union is in line with the basic human rights and the freedom of association and expressions, which no individual should be denied (Emerson, 2009). Therefore, through training the supervisors on the need to recognize and consequently respect the rights and freedoms of the employees to form and engage in union activities, the supervisors will cease to interfere with such freedoms of the employees, which will in turn serve to reduce the negative effects that the organization has felt, such as strikes and demonstrations. Additionally, by allowing the employees to engage in the formation of their own unions, they will be in a position to present their grievances to the employers or the relevant government agencies, which will, in turn, reduce the legal suits filed by the employees to the courts, which are detrimental to the organization, both in damaging its reputation, as well as causing it huge financial burdens (Dannin, 2006). The other fundamental aspect of the training for the supervisors, regarding the employee rights and freedoms, is the right of the employees to join and engage in the activities of a workers’ union, even if it is not recognized by the employer (Sack, 2010). This lesson will be very fundamental, since the employers can interfere with the rights of the employees to engage in u nion activities on the basis that such a union is not recognized by the employer. The fact that the employer does not recognize certain workers’ union does not limit the employee from joining such organizations. This fundamental

Corporate Social Responsibility and Globalisation Essay

Corporate Social Responsibility and Globalisation - Essay Example The discussion mainly focuses on the ethical principles underlying social responsibility in the business world. Ultimately, this essay argues that CSR becomes more and more important as globalisation rapidly develops. Confronting the growing environmental issues in the current global marketplace, MNCs are aggressively or constructively taking part in strategic programmes towards resource management and environmental preservation. Dedication of global businesses to sustainable initiatives are motivated by several internal and external factors, such as social activism, technological improvements encouraging sustainable programmes, customer demand for ecologically friendly goods and/or services, and governments’ environmental policies (Wilson 2000). Concerns about the corporate social responsibilities have been the point of contention for decades. However, recently, a new approach towards the issue has emerged and prevailed (Lechner & Boli 2004). Both in the corporate domain and beyond it, there is far-reaching and mounting advocacy for the existing idea of Corporate Social Responsibility (CSR). ... A particular explanation for this may be the perception that global corporations are not as impregnable as they were believed to be in the past; hence, their operations can be controlled to profit society (Wilson 2000). According to Bomann-Larsen and Wiggen (2004), another explanation could be a perception that successful legal regulation of businesses whose operations reach outside national boundaries is unlikely, making self-regulation as the sole realistic, feasible option. Thus, MNCs should self-regulate in a way that promotes the wellbeing of the society and its citizens. CSR has been controversial for decades, and some aspects of the subject matter have been introduced by ethicists. This controversy has been broadened recently to encompass the practices of MNCs. Even nowadays, the long-standing issue still reverberates through the halls of international corporations across the globe: â€Å"If it is legal, does that make it ethical?† (Manakkalathil & Rudolf 1995, 29) The emphasis of the word ‘ethics’ can be related to views concerning what is moral and what is not; one description of ethics may be the explanation of what comprises human wellbeing and the actions needed to support it. The concept of ‘ethical norms’ is brought into play to characterise compliance to generally accepted moral codes (Sullivan 2002). Consequently, according to Sims (2003), these moral codes are ruled mostly by values, traditions, and behaviour that a society implements as parameters for interpersonal manners. Hence, corporate social responsibility is tantamount to societal norms and values, which then implies that MNCs should formulate objectives that are congruent to

Is gambling a moral issue Essay Example | Topics and Well Written Essays - 1250 words

Is gambling a moral issue - Essay Example Although some of these arguments may be correct, gambling is more of a moral issue because it results in people’s suffering while others thrive. According to Fitzgerald there is no point in considering gambling and casinos as an economically viable industry. No doubt it adds to the pocket of a few and also contributes to the governments revenue box, yet considering the social maladies casinos and gambling are responsible for; it is more of a curse than blessing. Furthermore a healthy society can thrive amidst healthy individuals. Here health does not only refer to physical health but also the psychological one. Gambling results in erratic behavior through a complex neurochemical reaction that is far from being healthy and therefore according to Fitzgerald should be abstained from. Last but not the least the writer has also criticized gambling and casinos for spreading pollution and congestion in weekends through the rush of gamblers in peaceful localities where casinos are loc ated. Fitzgerald states at first that gambling although illegal in the state of California, in recent time permission has been extended to some Indian tribes. Might be placed in a light note but according to him since from historical times the Indians have been exploited by the other Americans the state now want to compensate them by conferring right of exploiting the others. United States of America as a uniform country must follow the same law for all and the logic that the writer has presented in legalizing gambling is no short of disgracing the goodwill of the government and the equality doctrine of the constitution. Without any grain of doubt the writer is against legalizing gambling but his arguments against such legalization are all driven on materialistic grounds. Fitzgerald has referred that gambling can never be considered as an economic boost owing to the $2 net loss it imposes on the government for each dollar earned as revenue. Another economic argument placed by the wr iter is the doubling of bankruptcy rate in countries with casinos in compare to those without them. The writer carefully states statistics to act as a psychologist while judging the compulsion of a gambler to spend more than he can afford. The statistics according to Fitzgerald in favor of such compulsion is quite high at 43%. Apart from economic and psychological reasons another aspect that Fitzgerald has referred to is the environmental aspect of gambling or casinos. The economic aspect that Fitzgerald has cited against gambling holds quite a ground. However quantifying the qualitative variables and indicators often stirs much debate. Owing to this fact it is hard to tell that whether the exact number that the writer has cited as a burden on revenue owing to gambling is appropriate. Another study amidst a different surrounding might have yielded a different result. Furthermore the modern day economics is a social science and much more beyond monetary value exists in a society that economic consideration must take into account. The psychological cost that gambling imposes on an individual in terms of erratic behavior and addiction might well receive a counter attack from those who support gambling and considers it as a means to joy. Gambling is based upon probability and neither the cost of loosing nor the profit from winning is assured. A

Phase 2 Individual Project Assignment Example | Topics and Well Written Essays - 2000 words

Phase 2 Individual Project - Assignment Example The primary objective of this case study is (a) to define fixed, variable, and mixed costs; (b) to determine cost behaviour patterns, and (c) to explain how these different patterns affect operating and pricing decisions. II.Cost Analysis a. Definition of Variable Costs + Example All expenses incurred that increase as the Production Output and Sales increases and decreases whenever the Production Output and Sales decreases should be considered as variable costs. Albrecht, Steve W., et.al.(2010, p.1062) defined variable costs in a more general way by saying that they are the costs that change in total in direct proportion to changes in activity level.. In the SAC operations, an example of the variable cost would be Raw Materials. The higher the demand for the product which would be evident in the increase in Sales volume, the higher the required Production Output, and a corresponding set of Raw Materials will be needed to produce the desired order quantity. b. Definition of Fixed Cost s + Example All expenses that are incurred whether or not operations are at high or low level should be called Fixed Costs. Rich, J.S., et. al. (2009, p.757) defined fixed cost as constant costs â€Å"within the relevant range as the level of of output increases or decreases.† At SAC, an example of that fixed cost is Depreciation Expense – Factory. Each month, whether or not the factory produces for high demand or for low demand, the value of depreciation expense will not change. c. Definition of Mixed Costs + Example Some costs known as mixed costs are made up of a combination of fixed cost and variable cost. Weygandt, J.J. et.al. (2009, p.209) teaches the need to separate these two in order to properly perform a cost-volume-profit analysis. Kinney, M.R. and Raiborn, C.A. (2012, p.70) also refers to the â€Å"high-low method† of determinine variable costs per unit and then separating it from fixed costs. That is, the formula to determine the portion that is var iable in a mixed costshould be as follows: Cost at High Level of Operations less Cost at Low Level Operations divided by High Activity Level expressed in volume of production or sales less Low Activity Level also expressed in volume of production or sales. The result will be the variable cost per unit within that mixed cost. Variable Costs may then be computed for its total and then separated from the total mixed cost in order to arrive at the fixed cost total within the mixed cost. In the case of SAC, there are data from two years, 2005 and 2006. Cost of Goods sold in 2005 was 50.81% whereas in 2006, the percentage increased to 59.30%. This means Cost of Goods Sold (CGS) may not be considered as 100% variable costs. A closer look at the details of CGS in the 2006 journal entries shows the following accounts: Cost of Goods Sold Raw Materials Labor Overhead Classification: Fixed, Variable, Mixed Supplies-Factory 3,500 MC Insurance-Factory 800 FC Indirect Labor 16,000 MC Factory Salar ies 12,500 FC Factory Property Tax 7,500 FC Maintenance Expense- Factory 8,700 FC Depreciation Expense-Factory 1,600 FC Utilities- Factory 3,650 MC Raw Materials RM, beg.=19,360 Purchases=33,710 RM, end= 10,000 RM, used 43,070 WIP, beg.= 1,800 RM processed = 41,270 WIP,end= 7,000 FG added=34,270 FG,beg.= 25,360 FG,total= 59,630 FG,end= 36,360 FG,sold= 23,270 VC Direct Labor 8,500 VC Selling Expenses 1,560 MC Admin.